Ilitch company says unpaid Detroit property taxes tallied in error

A look at Cobo Arena in its current state (below), and a courtesy rendering of what it is expected to look like after renovations are complete.Michael Wayland | MLive.com/Courtesy

DETROIT, MI - As legislation needed for a $650 million entertainment complex and new Detroit Red Wings arena to be built in downtown Detroit was passing through the state House Of Representatives, the Detroit Free Press examined property records and found that the Ilitch family company pushing for the development owes Detroit almost $2.1 million in unpaid property taxes.

The taxes in question stem from the Cobo Arena and the Joe Louis Arena.

But in a statement this evening, Olympia Entertainment says it has not received any notice from the city for delinquent taxes, and said that the city of Detroit owns the buildings.

"Upon further examination, it is our organization’s belief that the taxes in question have been accrued to Olympia Entertainment in what appears to be an error," the statement reads.

The company is not calling the Free Press report inaccurate, but said there instead appears to be a mistake with what entity is listed on the city's tax roll:

"Olympia Entertainment is incorrectly listed as the property owner of record on the tax rolls and our organization will be in touch with the Assessment Division within the City of Detroit’s Finance Department to have the property owner of record corrected on the tax rolls," the statement reads.

The company then says that it may owe taxes as a tenant of city-owned building, but those will be paid off:

"When our discussions with the City of Detroit on a new lease for Joe Louis Arena have been completed, the taxes Olympia Entertainment, as a tenant, may owe to the City, as the property owner, will be reconciled as previously agreed with City of Detroit officials. Both parties are moving forward expeditiously to finalize a lease renewal which in turn will allow the taxes to be reconciled. Our organization has a very good working relationship with the City of Detroit and we look forward to that continuing."

Meanwhile, legislation for the new arena and entertainment district passed by a 58-49 vote on Thursday, with some lawmakers on both sides of the aisle leery of the project's use of public funds.

The proposed mixed-use development would be funded by a mix of private investment and existing money collected by Detroit's Downtown Development Authority. No new taxes would be needed to build the development, but the state needed to pass House Bill 5463 to allow the DDA to continue to get money for these kinds of developments.

An exact location has not been named for the arena and district, which would include apartments and retail, but there is some speculation that it will be somewhere in the 10-block area between Midtown and downtown where development has been scant.

Olympia Entertainment says the new district would create an estimated 5,500 jobs for the events center and about 8,300 new positions for the residential and commercial mixed-use district, and would have an economic impact of $1.8 billion.

MLive statewide government reporters David Eggert and Tim Martin contributed to this report